He was largely unrecognized in his lifetime, but following the
Keynesian Revolution, he was recognized as one of the most significant influences on
The General Theory, and he is cited in Keynes's 1930
Treatise on Money (p. 90). He is credited with devising an early form of
effective demand, independent discovery of the
multiplier, and less recognized contribution to monetary economics and business cycle theory; . His 1903
Der Kreislauf des Geldes und Mechanismus des Sozial-Lebens (
The Circuit Theory of Money, written in German) can be seen as an early work in
monetary circuit theory. Crucially, he distinguished the roles of
savings and
investment – since only investment is directly productive, savings may be harmful to the economy, and may "tend to impoverish others" – a form of the
paradox of thrift. In his last years (1928), he warned of an upcoming long period of stagnation, which may be seen as prophesying the
Great Depression. ==References==